Ras Al Khaimah is part of the UAE federation, the world's sixth largest oil exporter.

Rakia is talking to banks for a loan to finance a $2 billion aluminium smelter and alumina refinery in the Indian state of Andhra Pradesh, Massaad said.

Ras Al Khaimah and Andhra Pradesh agreed in February to build the plant. Massaad said the first stage of the project would have the capacity to produce 1.5 million tonnes of alumina and 300,000 tonnes of aluminium a year.

"We are talking to several big international banks to underwrite the deal," Massaad said, declining to name the lenders.

The loan would be at least $1.4 billion and may comply with Islamic law. Syndication would begin after feasibility studies on the project are completed next month, he said.

Rakia will also begin a roadshow next month to sell at least $400 million of Islamic bonds to finance Al Marjan Island, a $1.8 billion develelopments of five man-made islands off the coast of Ras Al Khaimah, Massaad said.

Rakia will sell the debut senior US dollar Islamic bonds in November, banks managing the sale said in a statement last month. Credit Suisse, HSBC and NBD Investment Bank are bookrunners for the benchmark sale.

Rakia is not rated, and the bonds will be guaranteed by the government of Ras Al Khaimah, the banks said at the time.

Sukuk are typically based on assets that pay a dividend or rent to bondholders rather than interest, which Islam equates with usury.

The five man-made islands of Al-Marjan in the Gulf will cover 4 sq km (1.5 sq miles) with hotels and houses. The project is one of several by Rakia's property developer Rakeen. Set up in December, the firm is also working on projects in Italy, India and Ukraine, according to its Web site. -Reuters